| BenefitsLink Retirement Plans Newsletter |   |
January 19, 2007
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401(k) and Profit Sharing Plan Eligibility Survey 2006 (PDF)
Excerpt: "PSCA collected eligibility data from 427 companies. Respondent companies represent a diverse range of sizes, industries, and geographic locations. Data was collected for three different eligibility categories: participant deferrals, company matches, and company profit sharing." (Profit Sharing/401(k) Council of America)
Telling Participants About Revenue-Sharing Deals with Mutual Funds Offered As Investment Options
Excerpt: "Two revenue-sharing disclosure agreements recently hammered out could help set a new standard for sharing more details about these controversial deals with participants." (PLANSPONSOR.com; free registration required)
Cerulli Says 401(k) Outflows Will Accelerate
Excerpt: "The aging of the baby boomers already is starting to squeeze retirement plan providers. Researchers at Cerulli Associates, Boston, have presented that conclusion in a new review of the 401(k) market." (National Underwriter Life & Health; free registration or paid subscription required)
Automatic Rollover Law Reduced Cash-Outs of 401(k) Plans
Excerpt: "Every year millions of workers who retire or switch jobs must figure out what to do with money in their 401(k) plan. Should they leave the money with their former employer? Should they cash out? Should they transfer the money to their new employer's plan? Should they roll over the money into an IRA?" (MarketWatch via NewsEdge Corporation via Human Resource Executive Online; free registration required)
Overview: Guidance on PPA Distribution Issues
Excerpt: "In this article we focus on guidance concerning: new DC plan vesting rules; modification of the timing and content requirements for distribution notices; direct rollover/inherited IRA treatment for nonspouse beneficiaries; expansion of certain hardship distribution criteria for nonspouse/dependent beneficiaries; and modification of the interest rate used to calculate 415 limits." (CCA Strategies, LLC)
Will EGTRRA Permanence Improve Take-Up Rates for the Roth 401(k)?
Excerpt: "[T]he Pension Protection Act of 2006 (PPA) removed EGTRRA's sunsets, and the current political calculus suggests future tax rates are likely to be higher than the dramatically lowered structure brought into being with EGTRRA. Consequently, employers appear to be taking a fresh look at the option." (PLANSPONSOR.com; free registration required)
Commentary: Some Possible Hot Topics and Questions in Retirement Plan Investment Oversight for 2007
Excerpt: "In the last few years, I have seen a shift in the collective mindsets of plan sponsors as to the purpose of a 401k plan. More than ever before, among 401k committees making fiduciary decisions, there is a true concern for the financial well being of plan participants. It really does seem that plans are finally being looked at as an employee benefit, and that the best interests of participants really are important." (Jeb Graham via 401khelpcenter.com)
Opinion: The Battle for the Heart and Soul of the 401(k)
Excerpt: "Red states and blue states are engaged in a battle for the heart and soul of 401(k) plans. The outcome of that struggle will likely determine whether 401(k)s continue to be savings plans or develop into retirement plans." (PLANSPONSOR.com; free registration required)
Summary of Key Provisions Impacting Governmental 457(b) and 401 Plans (PDF)
Excerpt: "The summary is meant to assist governmental plan sponsors in understanding key provisions impacting 457(b) and 401 plans. Additional IRS guidance is expected on various issues, and we will provide details as they become available. Some provisions, particularly those dealing with automatic enrollment and investment advice, do not apply to governmental plans. However, we have included these sections as some employers use ERISA as a guide when designing plan provisions." (ICMA-RC)
Overview: Annual Revenue Procedures Updated for 2007
Excerpt: "The IRS has issued revised procedures for issuing determination letters on the qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans (ESOPs), and the status for exemption of any related trusts or custodial accounts. The revised procedures are effective January 2, 2007." (Wolters Kluwer Law & Business)
ERISA Compliance Calendar/Checklist
Excerpt: "Note: Certain provisions of the Pension Protection Act of 2006 generally effective for 2007 will require plan amendments. Plan amendments should be effective retroactively and will not violate anti-cutback rules if made on or before the last day of the plan year beginning on or after January 1, 2009 (or 2011 for governmental plans)." (PLANSPONSOR.com; free registration required)
Public Policy Monograph: Social Security Reform Options (PDF)
31 pages. Excerpt: "The report presents an overview of proposed reforms to the Social Security program. The intent is not to support any particular proposal, but to provide a clear, objective analysis of the options and assist the public policy process. Nevertheless, the report gives greater emphasis to those reform options that appear to be drawing the greatest attention from policy analysts and the media." (American Academy of Actuaries)
A New Study Rates Six Top Lifecycle Fund Families -- and Raises Some Interesting Issues
Excerpt: "Lifecycle funds can be tough to benchmark. However, a recent study attempts to rank six major target-maturity fund families -- and also maintains that many lifecycle funds are overpriced and have flawed asset allocations." (PLANSPONSOR.com; free registration required)
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Links to Items on Executive Comp, Benefits in General
Overview on Implementing FAS 158 for Year-End Financial Reporting
Excerpt: "In September, the Financial Accounting Standards Board (FASB) issued FAS 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans. For the most part, FAS 158 is remarkably simple. Companies will need to report on their balance sheet the funded status of their defined benefit plans and other postretirement plans." (CCA Strategies, LLC)
AALU Executive Reacts to Senate Deferred Compensation Proposal
Excerpt: "The Association for Advanced Life Underwriting is lobbying against the non-qualified deferred compensation provisions that were added Wednesday to the Senate Finance Committee's version of the minimum wage increase bill." (National Underwriter Life & Health; free registration or paid subscription required)
Overview of Updated 409A Guidance
Excerpt: "Last month, the Treasury Department issued Notice 2006-100, which provides updated guidance on withholding and wage reporting requirements for 2005 and 2006 under Internal Revenue Code Section 409A regarding nonqualified deferred compensation." (CCA Strategies, LLC)
Democrats Take Charge of the Legislative Agenda; Who's Who in the New Congress
Excerpt: "[W]hile the political winds definitely have shifted, in the short term, experts believe it will have little, if any, impact on benefits and retirement policy. After passage of the Pension Protection Act (PPA), legislators are 'pensioned out,' . . . . Executive compensation, however, is likely to get legislative scrutiny. Bigger shifts also may be in store if the Democrats retain control after 2008, particularly as to health-care benefits." (PLANSPONSOR.com; free registration required)
Law Firms Are Urged Not to Force Retirements
Excerpt: "A special committee of the New York State Bar Association is calling on law firms to end the practice of mandatory retirement for partners. In a strongly worded report that is to be released today, the committee concluded that 'mandatory retirement -- requiring a partner to leave the firm upon reaching an arbitrary age -- is not an acceptable practice.'" (The New York Times; free registration required)
Newly Posted Events
Successor Liability for Benefits in Asset Sales
Nationwide on February 13, 2007
presented by Paul, Hastings, Janofsky & Walker LLP
Newly Posted Press Releases
PBGC Assumes Kaiser Aluminum & Chemical Pension Plans
Pension Benefit Guaranty Corporation (PBGC)
Newly Posted or Renewed Job Openings
Senior Plan Administrator
for American National Insurance Company
in TX
Defined Contribution Compliance Consultant and Client Manager
for Results Oriented, Client Focused Retirement Plan Consulting Firm in PA
in PA
Retirement Sales Consultant
for John Mulligan & Associates, Inc.
in AK, AR, AZ, CA, CO, CT, DC, DE, IA, ID, IL, IN, KS, LA, MA, MD, ME, MI, MO, MS, MT, NC, NE, NH, NJ, NM, NV, NY, OK, OR, PA, RI, TN, TX, UT, VA, VT, WA, WI, WY
Retirement Plan Coordinator
for Capital Group Companies, Inc.
in CA
Group Benefits Operations Manager
for The Parker Group, Inc.
in CT, NJ, NY
Senior 401(k) / Retirement Plan Administrator
for Howard Simon & Associates, Inc.
in IL
Benefit Consultant
for APS - Arizona Public Service
in AZ
401(k) Plan Administrator
for Reed-Ramsey, Inc.
in IL
Pension Specialist
for Diversified Investment Advisors
in OR
Enrolled Actuary
for Summit Benefit & Actuarial Services, Inc.
in OR, WI
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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